Marine concession start in Ukraine: port «Oktiabrsk» – Stand by!

(from the issue №3, 147, October) State Enterprise «Specialized Sea Port «Oktiabrsk», after him – SE «Kherson Sea Trade Port» and the ferry complex of state enterprise «Sea Trade Port of Chernomorsk»: such plans for the upcoming concession in the maritime transport sector of Ukraine were told at the briefing at the berths of «Oktiabrsk» by Deputy Minister of infrastructure of Ukraine Nadezhda Kaznacheeva.

Together with the Deputy Minister the port was visited by the representatives of international financial organizations, as well as a specially created working group on the implementation of the concession in the industry. The head of infrastructure sector of the European Bank for Reconstruction and Development (EBRD) in Ukraine, Mark Magaletsky was quite restrained in the projections, although he noted that he was in hopeful mood: «Of course, Oktiabrsk has serious prospects, but there are certain restrictions on infrastructure. All such matters are subject to detailed study before it will be possible to form one or another plan for future development. And, of course, much will depend on what the demand will be in the market on what capacity – and what kinds of goods», – he stressed.

According to Yuri Gusev, advisor to the minister, the deputy head of the working group on the development of public-private partnership (PPP) in infrastructure, this visit was necessary in order to «discuss the format and the model of the concession, which can be implemented in the future». He recalled that the Ukrainian experts are working together with international financial institutions – the EBRD, the World Bank, as well as the Embassy of the Netherlands and a number of other organizations that help forming the «first outlines of PPP» in the country’s infrastructure. «All we have seen in Nikolaev and Kherson gives us confidence in the work towards the development of our own capacities and attracting of foreign companies to invest in the Ukrainian infrastructure on PPP principles», – he said.

Yuri Gusev said that in October, under the auspices of the Ministry of Infrastructure of Ukraine (MIU) and the public association «Easy Business», with the support of international financial institutions, the project office on PPP implementation starts working. «It will work in order to prepare all the necessary documents and the following year to show results – in the form of successful concession tenders and attracting foreign companies to participate in pilot projects of the concession in Ukraine», – noted Advisor to the Minister, and thanked the Bank for a grant for development of a new draft concession law, which aims to create a «new framework of rules of PPP» in the Ukrainian infrastructure.

Speaking of such a «modernization» of the legislation, Nadezhda Kaznacheeva expressed the hope that before the end of the year, this project will go to the parliament. «I believe that MPs will hear us and take the law in early 2017. During this same time, we, the ministry and the company, will fulfill our «homework», to develop the documentation needed for the concession tender – namely, technical, legal, environmental and financial expertise. When all these elements are made, we will proceed with the organization of the concession tender. I hope that by the end of next year it will happen», – Deputy Minister of Infrastructure said.

Benefits and expectations

Specialized sea port «Oktiabrsk» is in the Nikolaev region – close to the agrarian regions, which allows him to count on significant traffic flows of agricultural products, especially grain cargoes. According to the Acting Director of the State Enterprise, Ruslan Oleynik, the port area is almost 179 hectares. The depths (declared precipitate limited by the checkpoint depth of the Bug-Dnieper Liman channel is 10.3 meters) and the length of the mooring line (1.53 km) can accommodate vessels up to 230 meters and deadweight up to 80 thous. tons.

For storage of goods 277.2 thousand square meters of open storage areas and more than 41 thousand square meters of covered warehouses are provided. The installed processing capacity of the company now stands at 2.57 million tons of cargoes per year. The navigation continues year-round.

As noted in the theses of the concession project, prepared for this visit by experts of MIU and «Easy Business» association, the share of the company in the Ukrainian market of port services reached 10.7%, while net profit from 1 ton of goods – 3.43 US dollar. The key benefits of the project are: more efficient use of state property; increasing the income of enterprises engaged in economic activity in the territory of the seaport; transit trafficattracting; creation of new jobs and increase in revenues to the state budget.

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Meanwhile, the International Finance Corporation (IFC, part of the World Bank Group) intends to allocate 300 thousand dollars to conduct pre-work to prepare the transfer of SE «Kherson Sea Trade Port» concession. This, referring to representatives of «IFC» and sea port, was said by «Centre of transport strategies».

So, it is planned that by the end of November there will be a competition among international consultants to perform these works. «The World Bank Group will finance pre-feasibility study for the project; the process will last for several months. This is a detailed work, the studies – in what form a concessionwill be, the conditions under which the private partner will be involved, what obligations he will have», – said the «IFC» representative Oleg Kudashov.

«CFTS» reminded that previously the head of «Kherson Sea Trade Port» Andrey Sokolov admitted that the company can be offered to the investors in parts, although not excepting the possibility of assignment of the integral property complex. According to him, the extension of the enterprise development project will take about 4-5 months from the beginning of its financing.

«Kherson Sea Trade Port» is located on the right bank of the Dnieper, at a distance of 28 kilometers from the Dnieper-Bug Liman and 96 kilometers from the Black Sea. The approach channel depth is up to 7.6 meters. The port has one entry to the railway reloading and seven railway paths in the territory. SE has one cargo area where general and bulk cargoes are processed. Also on the left bank of the Dnieper River th

ere are two plants with berths and mechanization, which makes it possible to receive and handle cargo vessels. The length of the mooring line area is 1262 meters, the depth at the boundary of the pier – 7.6 meters, which gives the possibility to receive ships of up to 20 tons.